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U.S. January CPI report due on Tuesday
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Dollar index up 0.1%
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Fundamental outlook for silver remains very strong - analyst
(Updates prices)
By Ashitha Shivaprasad
Feb 13 (Reuters) - Gold prices inched lower as the
dollar firmed on Monday, although traders held off on big bets
as they positioned themselves for key U.S. inflation data this
week that could steer the Federal Reserve's rate-hike strategy.
Spot gold was down 0.2% at $1,861.13 per ounce,
as of 1150 GMT. U.S. gold futures inched 0.1% lower to
$1,873.10.
The dollar index was up 0.1%. A stronger U.S.
currency makes dollar-priced bullion more expensive for overseas
buyers. Benchmark 10-year Treasury yields hit their
highest level since early January. "Gold appears reluctant to make a massive move as the
critical U.S. inflation data looms," said Han Tan, chief market
analyst at Exinity.
"Fresh evidence that inflation remains stubbornly elevated
should prompt bullion to further unwind its year-to-date gains,"
but if inflation moderates sooner, it will allow the Fed to
pause rate hikes and there will be a greater chance of gold
climbing to $2,000, Tan said.
U.S. consumer price index (CPI) is expected to have climbed
0.4% in January. Revisions to the previous data set showed
consumer prices rose in December instead of falling as
previously estimated. The report is due on Tuesday.
While gold is traditionally considered a hedge against
inflation, elevated interest rates to tame the rising prices
translate to a higher opportunity cost of holding the
non-yielding bullion.
Money markets now expect U.S. central bank's target rate to
peak at 5.188% in July. Spot silver fell 0.1% to $21.98 per ounce.
"The fundamental outlook for silver remains very strong with
the metal in strong demand from the industrial sector and supply
unable to keep pace," Kinesis Money analyst Rupert Rowling said
in a note.
"Yet, for now, that fundamental case has not been heard,
with macroeconomic factors dominating trading sentiment
instead."
Platinum up 0.3% to $947.71 and palladium gained 0.3% at $1,547.75.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Emelia Sithole-Matarise and Sherry Jacob-Phillips)
